CHATTANOOGA, Tenn. (UTC/The Loop) – Tensions are running high as the expiration date of the 45-year-old sales tax agreement between Hamilton county and the cities of Hamilton county draws near.

In the Chattanooga City Council meeting on April 5, Councilwoman Deborah Scott addressed concerns that had been voiced about the sales tax agreement.

Hamilton County Mayor Jim Coppinger speaks to the Regional Health Council on April 4 about possible plans to cut the Health Department's budget if a sales tax agreement with the city of Chattanooga expires. Photo by Dan Henry/Chattanooga Times Free Press

Scott said in the meeting that, there really is no equality in a document which puts financial burdens on only some cities but not all cities and on some Hamilton County residents and not all Hamilton County residents.

Talks and resolutions are in the process of being discussed, as the May 23 expiration date looms closer. If the current agreement is allowed to expire, the county could lose up to $10 million annually.

The city of Chattanooga has refused to renew the 45-year-old agreement, and Hamilton County Mayor Jim Coppinger has stated that many agencies could face extreme budget cuts with the ending of the current sale-tax agreement.

Coppinger stated before the Chattanooga-Hamilton County Regional Health Council on April 4, that he hopes a new city-county sale-tax agreement will allow the money shared by the city and county to fund certain agencies.

Chattanooga Mayor Ron Littlefield wrote in a letter dated April 8, to Mayor Coppinger that he does not see the newly drafted agreement as a resolution.

Littlefield stated in the letter that, “When the city and county splits the cost of anything, city taxpayers are called upon to pay twice: once as a city taxpayer and again as a county taxpayer…. Regardless, the natural net effect is that approximately 80% of the cost is raised by the sweat of Chattanooga taxpayers.”

Littlefield continues that, “An analysis of the source of ‘county property tax dollars,’ based on Chattanooga’s part of Hamilton County’s assessed property tax, reveals that about 58 cents of every tax dollar you receive comes from a Chattanooga taxpayer.”

Councilwoman Scott reiterated these statements in the April 5 city council meeting. Some agencies were supported by both Hamilton County tax dollars and city of Chattanooga tax dollars, and Chattanooga residents pay 58% of Hamilton County taxes, Scott said.

Current Chattanooga City Council Members

The city of Chattanooga has not threatened to be the demise of any agency, Scott stated, but these agencies feel threatened because they have been receiving similar messages about the loss of funding. However, these messages have not been coming from the city of Chattanooga, Scott said.

Scott advised that the city of Chattanooga has tried to calmly explain the truth and apparently the truth is still not being widely distributed.

Councilman Jack Benson agreed that there is a real problem out there and the citizens of Chattanooga do not understand fully the unfairness of this situation.

People do not understand that city residents pay county taxes, Benson said, that he pays more county taxes than city taxes as county taxes are higher than in the city and people do not understand the inequities.

Scott defended the city of Chattanooga tax payers as very wonderful, giving people and they do not mind paying their fair share. However, she has not met many Chattanoogans that want to pay more than their fair share or even someone else’s fair share, Scott said.